Money managers
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“I never said a fee based adviser has no incentive to violate his fiduciary obligations. Just less incentive than a salesman.”
Do you know what fee-based means? I don't think that you do.[quote=anonymous]
“I never said ALL advisers are ethical. The incentives are not the same. The fee based adviser can continue to receive revenue with a buy-and-hold approach and the salesman cannot. It’s that simple.”
Instead, you just implied that registered reps are snake oil salesmen and fee-based adviser's are fiduciaries who do what is in the best interest of the client because they are legally bound to do so. You do realize that if an advisor is fee-based as opposed to fee-only, that means that they are able to earn commissions and are snake oil salesmen?
If you are charging strictly based upon AUM, and I think this is what you said that you would do, won't you personally lose money every time that you have a client buy or sell something? Therefore, you have a disincentive to change positions even if it is best for the client. If an advisor is earning money strictly from AUM fees, doesn't he lose money every time that he recommends that his client pay off debt, put money in savings, buy a SPIA, buy life insurance, buy disability insurance, buy long term care insurance, reinvest it in his business, etc.[/quote]
The client would be paying the trading costs so no conflict there.
As for your other point, a potential conflict of interest does exist and an ethical fiduciary will do what is in the clients interest. A non-fiduciary / salesman is under no such obligation.
[quote=anonymous]“I never said a fee based adviser has no incentive to violate his fiduciary obligations. Just less incentive than a salesman.”
Do you know what fee-based means? I don't think that you do.[/quote]
You are correct, I misspoke. Have a nice day and good luck to you.
Do you know what fee-based means.
An ethical fiduciary will do what is in the client's best interest. An unethical fiduciary won't do what is in the client's best interest. An ethical salesman will do what is in the client's best interest. An unethical salesman won't do what is in the client's best interest. Why are you struggling with this?[quote=max]
deekay:So as an investment advisor, if a single premium immediate annuity is appropriate for a client, how will you deal with it as an AUM advisor? Because you get paid by how many assets you have, wouldn't moving money to a SPIA not be in your best interest as an advisor? Isn't that a conflict of interest?[/quote][quote=max] [quote=etj4588] [quote=max]But, a fee based adviser doesn’t depend on product sales to generate revenue, a commission based rep does. Why do you think there are regs against churning? Because salesmen have an incentive to place their own interests above the client’s. [/quote]
That incentive does not solely reside in the commission-based world. I have personally witnessed fiduciaries get too aggressive in retiree portfolios in the hopes of raising AUM through market growth. The incentives are the same - to make more money - with either type of advisor.
[/quote]
I never said ALL advisers are ethical. The incentives are not the same. The fee based adviser can continue to receive revenue with a buy-and-hold approach and the salesman cannot. It’s that simple.
I never said a fee based adviser has no incentive to violate his fiduciary obligations. Just less incentive than a salesman.
[/quote]
What's the matter with salesmen and how are they different than people who charge perpetual fees?
[quote=anonymous]Do you know what fee-based means.
An ethical fiduciary will do what is in the client's best interest. An unethical fiduciary won't do what is in the client's best interest. An ethical salesman will do what is in the client's best interest. An unethical salesman won't do what is in the client's best interest. Why are you struggling with this? [/quote]An ethical non-fiduciary salesman is under no obligation to place the customer's interests before his own. A fiduciary is. Why are you struggling with this? I give up.
[quote=max] [quote=anonymous]Do you know what fee-based means.
An ethical fiduciary will do what is in the client's best interest. An unethical fiduciary won't do what is in the client's best interest. An ethical salesman will do what is in the client's best interest. An unethical salesman won't do what is in the client's best interest. Why are you struggling with this? [/quote]An ethical non-fiduciary salesman is under no obligation to place the customer's interests before his own. A fiduciary is. Why are you struggling with this? I give up.
[/quote] Bernie Madoff would like a word with you, Max.
So... licenses and registrations determine someone's ethics? That's what you're saying. You're a moron. Do you believe that there are ethical salespeople in any/all facets of sales? Do you believe that a license grants someone a conscience? If so, you have more faith in our state governments and FINRA than I will ever grant. The next thing we'll see is that ONLY a "fiduciary" advisor will help someone with their NEEDS while "salespeople" are only selling for their own commission.An ethical non-fiduciary salesman is under no obligation to place the customer’s interests before his own. A fiduciary is. Why are you struggling with this? I give up.
"An ethical non-fiduciary salesman is under no obligation to place the customer's interests before his own. A fiduciary is. Why are you struggling with this? I give up."
I believe that ethics comes from within. An ethical advisor, whether making his money from commissions or fees, is going to be ethical. Being ethical means always doing what is best for the client. The part that I'm struggling with is that you think that mode of compensation will impact one's ethics. Mode of compensation won't impact one's ethics. Poverty will. I am seriously questioning your ethics. You would believe that an ethical person is always an ethical person, unless you aren't ethical.[quote=anonymous]
“An ethical non-fiduciary salesman is under no obligation to place the customer’s interests before his own. A fiduciary is. Why are you struggling with this? I give up.”
I believe that ethics comes from within. An ethical advisor, whether making his money from commissions or fees, is going to be ethical. Being ethical means always doing what is best for the client. The part that I'm struggling with is that you think that mode of compensation will impact one's ethics. Mode of compensation won't impact one's ethics. Poverty will. I am seriously questioning your ethics. You would believe that an ethical person is always an ethical person, unless you aren't ethical.[/quote]
Each profession has its own code of ethics. It is NOT unethical for a non-fiduciary salesman to not be concerned about the interests of the customer. I would hope he would care but it isn't his function to care. It's his function to sell. It is the function of the fiduciary to care about his clients interests and to place them before his own. Because my personal code of ethics requires that I care about my clients, I prefer to be a fiduciary.
have you ever thought that a salesperson can have a code of ethics - even if it isn’t “dictated” to him by his profession?
[quote=max] [quote=anonymous]
"An ethical non-fiduciary salesman is under no obligation to place the customer's interests before his own. A fiduciary is. Why are you struggling with this? I give up."
I believe that ethics comes from within. An ethical advisor, whether making his money from commissions or fees, is going to be ethical. Being ethical means always doing what is best for the client. The part that I'm struggling with is that you think that mode of compensation will impact one's ethics. Mode of compensation won't impact one's ethics. Poverty will. I am seriously questioning your ethics. You would believe that an ethical person is always an ethical person, unless you aren't ethical.[/quote]
Each profession has its own code of ethics. It is NOT unethical for a non-fiduciary salesman to not be concerned about the interests of the customer. I would hope he would care but it isn't his function to care. It's his function to sell. It is the function of the fiduciary to care about his clients interests and to place them before his own. Because my personal code of ethics requires that I care about my clients, I prefer to be a fiduciary.
[/quote] So, if your personal code of ethics will only allow you to care about your clients, why would you prefer to be a fiduciary? Couldn't you do the same thing as a salesman? You'll make more money being a salesman. And over time you'll lose that over-inflated sense of superiority. That's a win-win-win for everybody!
This pretty much says it all.
http://www.forbes.com/2009/06/23/suitability-standards-fiduciary-intelligent-investing-brokers.html
http://www.forbes.com/2009/06/23/suitability-standards-fiduciary-intelligent-investing-brokers.html
Quoted directly from the article: There is one large caveat to all this. Just because someone is a fiduciary it doesn't mean you are home free. Arbitration statistics from the Financial Industry Regulatory Authority show that in 2008 there were 2,838 cases served that involved breach of fiduciary duty, vs. 1,181 for unsuitability. So, once again, there is no substitute for vigilance on the part of the investor, no matter who handles your finances. A crook is a crook is a crook. A rep who is ethical will treat his clients ethically, regardless of their compensation, licenses, or extra credentials.This pretty much says it all.
Suitability: Where Brokers Fail
Take a look at this one:
http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20090608/REG/906079995/1094/INDaily01max - the people on this forum have been doing this a lot longer than you.
Why do I treat you better than LA Broker? I don’t know.
But seriously, listen to the people here. They know what they are talking about. I’m sorry, but you don’t. You came here for advice. You got it.
[quote=max] [quote=Sportsfreakbob][Quote] Because I will be offering performance to distinguish myself from other advisers, a track record is essential. [Quote]
Max, I just gotta say, you are a clown. What are you a prophet? Think this thru. Think what you are saying. You probably made a good call in mid 2007, and now you are the prophet Mohammed. Did anyone say, Elaine Garzarelli? I dont post much here as i used to, but i just had to say, Max, you are a clown.[/quote]
You don't know me sportsfreak. You don't know if I have skills or not. You are simply projecting. You can't beat a benchmark and none of the boiler room guys you know can beat a benchmark so you assume it can't be done. You are wrong.
[/quote] You remind me of Windy and LABroker, guys in the business a week claiming to be superstars. You dont know jack. Why should we believe you? Share your theories. My clients told me for 7 years about this guy Madoff who made 14% every year no matter bull or bear market. Are you smarter than Marty Sosnoff, Chris Davis, Mario Gabelli? Because they cant seem to do what you claim to do. I dont have to know you. I have met enough geniuses just like you You are an owned clown